The rise in atmospheric CO2 concentrations (Ca) has been related to tree growth enhancement and increasing intrinsic water-use efficiency (iWUE). However, the extent that rising Ca has led to increased long-term iWUE and whether climate could explain deviations from expected Ca-induced growth enhancement are still poorly understood. The aim of this research was to use Ca and local climatic variability to explain changes during the 20th century in growth and tree ring and needle δ13C in declining and nondeclining Abies alba stands from the Spanish Pyrenees, near the southern distribution limit of this species. The temporal trends of iWUE were calculated under three theoretical scenarios for the regulation of plant-gas exchange at increasing Ca. We tested different linear mixed-effects models by multimodel selection criteria to predict basal area increment (BAI), a proxy of tree radial growth, using these scenarios and local temperature together with precipitation data as predictors. The theoretical scenario assuming the strongest response to Ca explained 66–81% of the iWUE variance and 28–56% of the observed BAI variance, whereas local climatic variables together explained less than 11–21% of the BAI variance. Our results are consistent with a drought-induced limitation of the tree growth response to rising CO2 and a decreasing rate of iWUE improvement from the 1980s onward in declining A. alba stands subjected to lower water availability.